Domestic markets are likely to open on a flat note on Monday. Gift Nifty at 22,147.50 against NIfty Feb futures’ Friday close of 22,097 indicates a positive beginning. However, cues from Asian stocks are mixed. Lack of triggers to keep market in a range said analysts, while foreign portfolio investors will set market direction, they added. As they remained sellers, the chance of the market seeing profit taking on every rise is higher, they added.
Vinay Paharia, CIO of PGIM India Mutual Fund, said cautious about the near-term return potential for markets.
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VK Vijayakumar, Chief Investment Strategist of Geojit Financial Services, “The spike in US bond yields triggered by the higher-than-expected consumer price inflation led to sustained selling by FPIs in the cash market.
The selling by FPIs in equity would have been much higher in response to the rising US bond yields. “But FPIs have been consistently losing the tug of war with DIIs and, therefore, they are a bit reluctant to press aggressive selling. They will have to buy the same stocks later,which they have been selling, when conditions are favourable for buying,” he added.
Results behind
Analysts said India Inc. reported sequentially better performance with the result season almost over.
Vinay Paharia said the Q3-FY24 results announced till January 2024 were largely in line with expectations, with healthcare and cement sector companies reporting inline or better than expected numbers and real estate, retail and consumer sector companies reporting disappointing earnings.
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According to Emkay Global Research, Q3-FY24 earnings were strong and largely aligned with estimates. Topline growth remains weak, and margins—though stable sequentially—benefited from a weak base last year.
Consensus Nifty earnings estimates remained resilient and unchanged through the earnings season. Industrials stood out on topline and margins, while consumer discretionary was aided by operating leverage. Financials reported steady growth, although the base effect is dwindling and growth rates are tapering. We remain constructive on the markets and expect most CY24 returns to be bunched in the Apr-Sep period.
According to analysts, the roller-coaster ride continues with bouts of volatility, experts said.
Ruchit Jain, Lead Research, 5paisa.com, said: “ Our markets have seen some roller coaster move last month. However, this volatility has been within a broad range where the index resisted twice around 22127, and the declines from that support witnessed buying interest around the 40-day EMA.
This seems to be a time-wise correction within an uptrend as the broader markets, too, were overbought and have cooled off in this phase, he added.